Portercare Adventist Health Sys. v. Lego

• Decision Date: 15 October 2012
• Docket Number: No. 10SC765.,10SC765.
• Citation: 2012 CO 58,286 P.3d 525
• Parties: PORTERCARE ADVENTIST HEALTH SYSTEM, d/b/a Porter Hospital, Petitioner v. Robert T. LEGO, Respondent.
• Court: Colorado Supreme Court

286 P.3d 525

2012 CO 58

PORTERCARE ADVENTIST HEALTH SYSTEM, d/b/a Porter Hospital, Petitioner

v.Robert T. LEGO, Respondent.

No. 10SC765.

Supreme Court of Colorado,

En Banc.

Sept. 24, 2012.

Rehearing Denied Oct. 15, 2012.

McConnell Fleischner Houghtaling, LLC, Traci L. Van Pelt, Matthew C. Miller, Jennifer L. Ward, Denver, Colorado, Attorneys for Petitioner.

Burg Simpson Eldredge Hersh & Jardine, P.C., Diane Vaksdal Smith, Brian K. Matise, Russel Murray, III, Englewood, Colorado, Attorneys for Respondent.

Castle Stawiarski, LLC, Kimberly L. Martinez, Denver, Colorado, The Law Offices of David C. Japha, P.C., David C. Japha, Denver, Colorado, Attorneys for Amicus Curiae Colorado Creditors' Bar Association.

Greenberg & Sada, P.C., Alan Greenberg, Englewood, Colorado, Attorneys for Amicus Curiae ACA International and Associated Collection Agencies/Colorado and Wyoming, Inc.

Colorado Legal Services, Joel R. Hayes, Jr., Brandy L. Rothman, Boulder, Colorado, Attorneys for Amicus Curiae Colorado Legal Services.

Faegre & Benson, LLP, Dirk W. de Roos, Sarah L. Geiger, Denver, Colorado, Attorneys for Amicus Curiae Colorado Hospital Association.

Justice RICE delivered the Opinion of the Court.

¶ 1 In this hospital debt collection action, we interpret section 13–80–103.5(1)(a), C.R.S. (2011), and hold that its six-year limitations period applies in cases, like this one, that arise out of an implied in fact contract for liquidated medical expenses. Contrary to the court of appeals' holding in Portercare v. Lego, ––– P.3d ––––, ––––, 2010 WL 3584394 (Colo.App.2010) (selected for official publication as modified), the applicability of section 13–80–103.5(1)(a) in the hospital debt context is not limited to cases where an agreement specifically sets forth an amount owed or a formula for calculating such an amount. Rather, a contract for hospital services contains a “liquidated debt” for the purposes of section 13–80–103.5(1)(a) if the amount owed is ascertainable either by reference to the agreement, or by simple computation using extrinsic evidence if necessary. Rotenberg v. Richards, 899 P.2d 365, 367 (Colo.App.1995) (citing Restatement (Second) of Contracts § 354 cmt. c (1981)). Here, the contract claim involves a liquidated debt because the amount owed was ascertained by adding pre-determined rates for the medical services provided. We therefore reverse the court of appeals' judgment in favor of Respondent Robert T. Lego.

¶ 2 In addition, because we hold that the six-year statute of limitations applies in this instance, Petitioner Portercare Adventist Health System (Porter) timely filed its debt collection action against Lego even if the action accrued, as Lego argues, in November 2001. Therefore, we need not reach the accrual issue upon which we granted certiorari.¹ Accordingly, we reverse the decision of the court of appeals and remand for further proceedings consistent with this opinion.

I. Facts and Procedural History

¶ 3 On August 14, 2001, Porter admitted Lego's unresponsive wife to its emergency room. Mrs. Lego remained in the hospital until November 9, 2001. In late September of that year, the Legos' insurance provider notified Lego in writing that it would stop covering Mrs. Lego's hospital care after October 10, 2001. Lego disputed the insurer's position and refused to have his wife discharged from Porter.

¶ 4 Porter subsequently sent the Legos written notice that their insurer would stop covering Mrs. Lego's hospital care after October 10, 2001, and that the Legos would be responsible for the cost of Mrs. Lego's medicalexpenses after that date. On October 24, 2001, Porter's Director of Patient Access, Leslie Richard, orally notified the Legos at the hospital of their financial responsibility for Mrs. Lego's care after October 10. Richard offered Lego two brochures about patient financial responsibility. Lego declined the brochures and, despite acknowledging the insurance company and Porter's notices, he expressly and repeatedly refused to accept responsibility for any of Mrs. Lego's medical costs. He did not, however, ask the hospital to discharge Mrs. Lego. Mrs. Lego eventually left Porter on November 9, 2001. She subsequently passed away.

¶ 5 Porter received payment from the Legos' insurance company to cover Mrs. Lego's care between August 14, 2001, and October 10, 2001. Consistent with the notice it sent the Legos, the insurance company refused to pay for any of the expenses incurred after October 10, 2001. As a result, Porter sent Lego a $144,044.36 bill on November 24, 2001, for the cost of Mrs. Lego's medical services from October 11, 2001, when the insurance company ceased coverage, until Mrs. Lego's discharge on November 9, 2001. Lego refused to pay the bill.

¶ 6 In an effort to recoup the outstanding debt, Porter initiated an action for “money owed” against Lego on April 28, 2005. Lego moved the trial court to dismiss the action on statute of limitations grounds. He argued that Porter's action was for unjust enrichment with recovery in quantum meruit and was therefore barred by the general three-year statute of limitations for contract actions codified at section 13–80–101(1)(a), C.R.S. (2011). The trial court denied the motion. It found that Porter's action resulted from an implied in fact contract, not from unjust enrichment. It also found that factual questions remained as to whether the debt Porter claimed was “liquidated” or “determinable” for the purposes of the six-year statute of limitations in section 13–80–103.5(1)(a).

¶ 7 Lego renewed his statute of limitations argument in a motion for summary judgment. The trial court denied that motion as well and additionally found, without detailed analysis, that the $144,044.36 debt claimed by the hospital was “liquidated” for the purposes of section 13–80–103.5(1)(a). It accordingly applied the six-year statute of limitations contained in that section to Porter's “money owed” action.

¶ 8 The case proceeded to trial. The jury found Lego liable for breach of an implied in fact contract with Porter that arose as a result of the parties' conduct. It awarded Porter the entire debt of $144,044.36. Lego appealed the verdict to the court of appeals on numerous grounds, including that the trial court erred in applying the six-year statute of limitations to Porter's implied in fact contract claim.

¶ 9 The court of appeals reversed the trial court's finding that the six-year statute of limitations described in section 13–80–103.5(1)(a) applied to Porter's “money owed” action. It held that an amount due is “liquidated or determinable within the meaning of section 13–80–103.5(1)(a) only where the agreement sets forth an amount owed or a formula for calculating an amount owed.” Portercare, ––– P.3d at ––––. The court of appeals then analyzed the implied in fact agreement between Lego and Porter and held that the contract did not set forth an amount owed, or a formula for calculating such an amount. Id. at ––––. Accordingly, the court of appeals held that Porter's action was subject to the general three-year statute of limitations for contract actions in section 13–80–101(1)(a), rather than the six-year statute of limitations in section 13–80–103.5(1)(a). Id. at –––– (citations omitted). The court of appeals then reversed the judgment of the trial court as a matter of law because Porter initiated its action more than three years after its implied in fact contract claim accrued in November 2001. Id. at ––––.

¶ 10 Porter petitions this Court for certiorari review of the court of appeals' opinion. It asks us to determine whether the court of appeals improperly construed section 13–80–103.5(1)(a) when it limited that section's applicability to instances where “the agreement sets forth an amount owed or a formula for calculating an amount owed.” Id. at ––––.

¶ 11 After outlining the standard of review for statutory construction, we interpret the term “liquidated debt” in section 13–80–103.5(1)(a). We then apply our interpretation in the hospital bill context and hold that the $144,044.36 Porter claims in this breach of implied in fact contract case is a “liquidated debt.” As such, we apply the six-year statute of limitations, reverse the judgment of the court of appeals, and remand for further proceedings consistent with this opinion.

II. Standard of Review

¶ 12 Statutory construction is a question of law that we review de novo. Spahmer v. Gullette, 113 P.3d 158, 161 (Colo.2005). Our primary duty in construing statutes is to give effect to the intent of the General Assembly. Lombard v. Colo. Outdoor Educ. Ctr.,Inc., 187 P.3d 565, 570 (Colo.2008). We begin our de novo review with an analysis of the plain language of the provision. Wolf Ranch, LLC v. Colo. Springs, 220 P.3d 559, 563 (Colo.2009). When this language is unambiguous, we give effect to the plain and ordinary meaning of the section without resorting to other rules of statutory construction. Stamp v. Vail Corp., 172 P.3d 437, 442–43 (Colo.2007). We will construe words and phrases used in a statute together and in context. Pearson v. Dist. Court, 924 P.2d 512, 516 (Colo.1996).

III. Liquidated Debt

¶ 13 In general, contract actions are subject to a three-year statute of limitations. § 13–80–101(1)(a). If a contract is for a “liquidated debt” or for an “unliquidated, determinable amount,” however, it falls under the six-year statute of limitations provided by section 13–80–103.5(1)(a). See§ 13–80–101(1)(a) (contract actions subject to three-year limitations period “except as otherwise provided in section 13–80–103.5”). This Court has not previously interpreted the meaning of the terms “liquidated debt” or “unliquidated, determinable amount.” This case therefore presents an issue of first impression. We begin our analysis by interpreting the meaning of the term “liquidated debt.”

¶ 14 The court of appeals narrowly construed the meaning of “liquidated debt” in this case. It held that an amount due for the...